Within households, we defined health insurance units (HIUs) which include an individual, their spouse if they are married, and all dependent children of either the reference individual or their spouse. The surcharge is an extra charge on your health plan if you're a tobacco user or for those who don't partake, they may receive a discount. This blog post is for informational and educational purposes only. 8600 Rockville Pike Even though federal law permits a tobacco surcharge on health insurance, some states prohibit this. The employer can apply the tobacco surcharge only if the employees do not participate in the tobacco cessation program. This finding was robust across a variety of specifications. Tobacco surcharge may also be incorporated in the employer-sponsored health plans that can increase the standard premium by up to 50% unless a state has implemented a lower tobacco surcharge. The DOL alleged that this refusal to refund or credit participants for the tobacco surcharge even if they met a reasonable alternative standard violated the ERISA requirement that the full reward be available to all similarly situated individuals of a wellness program. Policy: Christopher Nelson Caitlin Styrsky Molly Byrne Katharine Frey Jimmy McAllister Samuel Postell , Plans in both market segments are allowed to charge enrollees different rates based on the same four factors. In addition, 14 percent used . County populations were pulled from the 2014 and 2018 American Community Survey annual county level estimates and aggregated up to the rating area level. As such, several previous studies have shown that gaining access to health insurance can have large effect on both quitting smoking and cancer screening. We found that living in a surcharge state decreased the probability of enrolling in a nongroup plan by 13.3 percentage points (P<.01) among these individuals who are most likely to benefit from the marketplacesthose with incomes over 138% FPL who do not have insurance through their employer or a public program. You may switch to Article in classic view. Now is a good time to review whether your wellness program is compliant with ERISA and other wellness program laws, including HIPAA, ADA, and GINA. State by State Tobacco Laws, Taxes, and Statistics. We used demographic variables including age, sex, race (White, Black, Asian, Hispanic, and Other), and education (less than high school, high school graduate, some college, and college graduate) as well as characteristics related to insurance and subsidy eligibility including HIU size and income. This report must include the name of each insurance carrier on behalf of which the TPA paid. We used linear probability models with a differenceindifference specification. Allowing tobacco surcharges at all and having larger tobacco surcharges were each associated with lower takeup of insurance. 4 An employer cannot set a deadline by which an employee can no longer use tobacco. Best steps for trap avoidance: offer a reasonable alternative and notify employees of its availability. You may notice problems with By limiting the sample respondents in states with tobacco surcharges, we were able to estimate the effect of the size of the surcharge on insurance enrollment. Each column is a separate regression, and the interaction term between the percent surcharge and current smoker shows the key differenceindifference coefficient. State of Montana Health Care & Benefits Division 100 North Park Ave ., Suite 320 P.O. Respondents also listed tobacco surcharges as a major factor. , 21 Health Serv Res. The Affordable Care Act allows insurers to charge up to 50% higher premiums to tobacco users, making tobacco use the only behavioral factor that can be used to rate premiums in the nongroup insurance market. 54:40A-4.1 The tobacco products that are counted include traditional cigarettes, cigars, chewing tobacco, e-cigarettes, vaping, and pipe smoking. The most common options include (i) HSA, HRA or FSA contributions; (ii) a decrease in employee contributions toward medical coverage (often referred to as a tobacco surcharge); and (iii) cash, gift cards or entries into a prize drawing. The Office on Smoking and Health conducts and supports national and international surveys on tobacco use, smoking cessation, secondhand smoke exposure, and other tobacco-related topics among youth, adults and specific populations. Tobacco use is the largest cause of preventable disease and death in the United States, Third Party Administrators (TPAs) that make payments to hospitals and ambulatory surgical centers on behalf of one or more insurance carriers (not self-insured plans) must file an annual electronic report with the HSN. Some states have set more restrictive limits on rating for tobacco use, and several states have outlawed tobacco premium surcharges altogether. Six states and DC have banned tobacco surcharges in their entire individual market: California District of Columbia Massachusetts New Jersey New York Rhode Island Vermont Virginia lawmakers passed legislation in 2022 that would have banned tobacco surcharges as of 2023, but the governor vetoed the measures. , Finally, we examined the impact of the size of tobacco surcharges on enrollment using a linear probability model with a differenceindifference specification to predict the likelihood of any insurance coverage as well as the probability of nongroup coverage among those without insurance through an employer or public program. 2020 Dec; 55(6): 983992. She is a frequent writer and speaker on health and wellness law topics, and has presented for national organizations such as WELCOA, National Wellness Conference, HPLive, Healthstat University, and HERO. 2 Tip Sheet: How to Implement a Smoking Surcharge on Health Insurance, The EX Program qualifies as a reasonable alternative standard and has helped over 940,000 tobacco users build the skills and confidence for a successful quit. Tobacco Use People who use tobacco can be charged up to 50% more than the people who dont use tobacco. All regressions are weighted using the appropriate weights from the Current Population Survey. Tobacco Users Pay Health Insurance Surcharges as per State and Federal Rules, Complete Overview on Buying Private Health Insurance Plan, Significant Differences between Public and Private Health Insurance Plan, Master the Tips to Shop for Health Insurance, Get personalized help related to Insurance Products, Service & Claims, Tips to Choose between Obamacare and Employer-sponsored Health Plans, Enrollment in Individual Health Plan is still possible after Ending of COVID SEP in the Most States, Free Health Insurance for Uninsured Americans with Stimulus Package. Tobacco users will pay a surcharge for their health plan coverage beginning July 1, 2022. Notably, our point estimates are in line with those reported by Friedman et al Individuals are able to report multiple sources of health insurance in CPSASEC. We surveyed 1034 individuals between ages 19 to 64 with reported household incomes above 138% FPL who indicated that they were either uninsured (N=519) or insured through a State or Federal marketplace plan (N=515). All states with a minimum tobacco age of 21 decreased the limit. 64C increased from 30% to 40% of the wholesale price of the products, and smokeless tobacco products increased from 90% to 210% of the wholesale price. If the program imposes a tobacco surcharge based on whether participants smoke (or otherwise use tobacco), participants who request an alternative standard must be offered a reasonable one,. (May 13, 2013) On May 9, 2013, that the Executive Yuan (Cabinet) of the Republic of China (on Taiwan) approved amendments to the Tobacco and Alcohol Tax Act and to the Tobacco Hazards Prevention Act that, if they become law, would, respectively, increase the taxes and the health surcharge on tobacco products. Share & Print Documents & Downloads Issue Brief - States Vary on Higher Premiums Paid by Tobacco Users Under the ACA Related Tags Affordable Care Act But Macys tobacco affidavit also said, I understand that the tobacco surcharge will not be changed retroactively, and no refunds or credits will be issued.. We also considered a comprehensive model of health insurance selection, by utilizing a multinomial logit regression to examine the likelihood of being covered under various types of insuranceemployer, nongroup, public, or uninsured. Results showing the impact of the size of tobacco surcharges are presented in Table4. 11 3 Michael F. Pesko, Georgia State University. and nonsmokers who use tobacco may be less likely to consider themselves to be regular tobacco users. The federal law gives insurers the right to add up to 50 percent to the cost of individual health care coverage. John Lehman. Our contribution is particularly important to state policy makers because they may want to understand the comparative effectiveness of banning tobacco rating versus limiting the size of potential surcharges. One of the most important aspects of the Affordable Care Act (ACA) was the introduction of modified community rating in the nongroup insurance market, which drastically changed how premiums could be set. Alaska increased its tobacco age restriction from 16 to 19 in 1988. As additional robustness checks, we also examined subsamples including individuals with incomes between 138% FPL and 400% FPL, who are most likely to qualify for subsidies and those older than 25 who no longer qualify for dependent coverage. HHS Vulnerability Disclosure, Help Currently, three states limit surcharge sizes to less than 50%Kentucky (40%), Arkansas (20%), and Colorado (15%), in addition to the six states plus the District of Columbia that have eliminated surcharges all together. For the purposes of this study, we limited the sample to uninsured individuals (N=519). Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. 7 19 Premium rating rules for nongroup insurance and small group plans (generally plans provided by employers with fewer than 50 employees) are similar. And in states like California, Rhode Island, Vermont, the District of Columbia, Massachusetts, New York, and New Jersey are not allowed to charge higher premiums from tobacco users. , To be in full compliance with the ERISA wellness incentive rules, wellness programs that impose a tobacco surcharge on employees who use tobacco must pass a 5-factor test. **Please Note: Nothing contained in this blog post is to be construed as legal advice. Most states, however, follow the federal law and allow insurers to impose tobacco surcharges of up to 50% but employer wellness programs must follow certain rules for those surcharges to be legal. and state law. Despite ACA lawmakers strong feeling that an individuals health condition should not be taken into consideration when setting the health insurance premiums, still they allowed health insurers to charge higher premiums from the tobacco users. 2020;55:983992. In August 2017, the United States Department of Labor (DOL), which enforces compliance with ERISA, sued Macys, Inc. as well as its third-party administrators for its self-insured health plan: Anthem Blue Cross Life and Health Insurance Company and Cigna. 15 Though insurance companies no longer base health insurance premium depending upon applicants medical history and they are not even allowed to reject an application based on their pre-existing conditions or based on their health history, but ACA allows health insurance companies to base premiums depending on factors like age, family size, geographic location, as well as tobacco use. 2016 Jul 1;35(7):1176-83. doi: 10.1377/hlthaff.2015.1540. We assigned primary coverage to each respondent based on the following hierarchy: Medicare, employer, nongroup, Medicaid, other public, and uninsured. Cameron M. Kaplan, PhD and Erin K. Kaplan, PhD. The table presents relative risk ratios from a differenceindifference specification similar to the one presented in Table2 and including all income levels. Evidence Suggests That The ACA's Tobacco Surcharges Reduced Insurance Take-Up And Did Not Increase Smoking Cessation. Tobacco products are mostly used by lower-income Americans than higher-income Americans. Additionally, recent research has cast doubt on whether small employers complied with either the rating rules or the exemption for tobacco cessation, particularly in the early years of the ACA. External Relations: Moira Delaney Hannah Nelson Caroline Presnell Finally, we calculated income as a percentage of the federal poverty level (FPL) using family income, the number of people in the HIU, and the appropriate FPL based on year and state of residence. The https:// ensures that you are connecting to the In addition, there is large variation in tobacco surcharges even within states that allow surcharges since most insurers do not charge the maximum allowable surcharge. Would you like email updates of new search results? Study design: The cigar and smoking tobacco excise imposed by M.G.L. Under a law signed by Gov. This paper contributes to a small existing literature on the impact of tobacco surcharge laws on health insurance enrollment. We examined the impact of state level tobacco surcharge policy on health insurance enrollment decisions among smokers. See details about the 5-factor test in my previous blog post, What Is a Tobacco Surcharge and How Does My Company Offer One? Thursday, Feb 7 2013 Assembly Bill Would Block ACA Tobacco Surcharge Last week, Assembly member Richard Pan (D-Sacramento) introduced a bill ( AB 1X2) that would block an Affordable Care Act provision that allows insurers to charge smokers with an individual policy up to 50% more in premiums from being implemented in California. Post author By ; Post date western nebraska community college admissions western nebraska community college admissions Tobacco use is the leading preventable cause of death in Georgia and is a modifiable risk factor for many chronic diseases, which costs the state more than 11,700 lives per year and nearly $3.2 billion in direct healthcare and indirect costs, such as lost wages. Although we did not have data from other years, the fact that our results were similar across the two years gives us confidence that pooling the data is a valid approach. 13 Allowing a tobacco surcharge reduced insurance enrollment among smokers by 4.0 percentage points (P=.01). Thus, the actual monthly premium paid by the tobacco users will depend upon the health insurance company they choose and the area in which they are living. Proponents of tobacco surcharges argue that higher premiums for tobacco users could lead to lower premiums for nonusers, increase insurer participation, and create an incentive for tobacco users to quit. We hypothesized that there would be lower enrollment among smokers, relative to nonsmokers, in states that allowed tobacco surcharges compared to states that outlawed rating by tobacco use. The University of Southern California Institutional Review Board approved the survey data collection and deemed the analysis of data from the CPS as exempt from full review, and the relevant part of the survey questionnaire is included in Appendix S2. Among those who would be able to purchase health insurance through the marketplaces but chose to remain uninsured, the tobacco surcharge was reported as a major factor in the decision. We then asked respondents to select all reasons they did not enroll in a marketplace plan. The ACA requires that all health insurance plans provide tobacco cessation and lung cancer screening with no outofpocket costs. Nearly Half Of Small Employers Using Tobacco Surcharges Do Not Provide Tobacco Cessation Wellness Programs. We compared insurance enrollment in states that did and did not allow tobacco surcharges, using a difference-in-difference approach to compare the policy effects among smokers and nonsmokers. The 2019 ASEC included variables that specifically identify marketplace coverage, so we examined whether the effect is driven by those with marketplace plans using the 2019 data only. The ePub format uses eBook readers, which have several "ease of reading" features Standard errors, clustered at the state level are shown in parentheses. We also excluded children under 19 who did not participate in the CPSTUS and who qualify for Medicaid/CHIP at higher income thresholds than adults. While surcharges unambiguously lead to higher premiums for tobacco users in nongroup markets and thus ought to lead to lower enrollment, theoretically, surcharges could lead to either higher or lower enrollment in employer coverage. sharing sensitive information, make sure youre on a federal [PMC free article] [PubMed] [CrossRef] [Google Scholar], 1 14 Agents are available: Mon - Fri, 8 AM - 8 PM ET. PMID: 35254928 DOI: 10 . Specifically, our model compares the insurance status of smokers to nonsmokers across states with and without tobacco surcharges. Those on employer health plans can avoid the surcharge by joining an employer based tobacco cessation program. Surveys. Employees are eligible for a discount/incentive at least once a year. if(document.getElementsByClassName("reference").length==0) if(document.getElementById('Footnotes')!==null) document.getElementById('Footnotes').parentNode.style.display = 'none'; Communications: Alison Graves Carley Allensworth Abigail Campbell Sarah Groat Lauren Nemerovski Caitlin Vanden Boom Unfortunately, the prepost approach may not yield accurate estimates because it does not account for the fact that tobacco rating was allowed in the nongroup and small group markets prior to 2014. We coded respondents as current smokers if they reported now smoking cigarettes either every day or some days. This definition is slightly different from the definition used to apply the tobacco surcharge, which is the use of tobacco products four or more times, on average, per week within the past six months. We used the narrower definition, considering only cigarette smokers because cigarette smokers make up most of the population of every day tobacco users Our main source of data was the Current Population Survey (CPS). In plan years 2011 and 2012, the program failed to offer employees a reasonable alternative standard and notice of that reasonable alternative standard. 12 On the other hand, tobacco surcharges may discourage insurance enrollment among tobacco users. Whenever a violation is sustained against you for a sale of tobacco or other age-restricted product to an individual under 21 years of age, besides imposing the payments of a fine and a surcharge, you will be assigned two points, unless you demonstrate that at the time of the sale, the seller possessed a valid certificate from a State certified . We are experimenting with display styles that make it easier to read articles in PMC. The lawsuits also teach us that wellness programs must not only offer a reasonable alternative standard but must make sure that anyone who completes that reasonable alternative standard qualifies for the entire reward for that plan year. romantic things to do in dubuque, iowa. We limited the sample to individuals in states with tobacco surcharges, comparing the impact of the size of the average tobacco surcharge on differences in insurance coverage between smokers and nonsmokers. Thirty-eight states also have laws in place setting the tobacco age restriction to 21. You will be charged a $25 tobacco use premium surcharge in addition to your monthly medical plan premium if you or any dependent (age 13 and older) who is enrolled on your SEBB medical coverage uses a tobacco product. USA, 2 Jay Inslee (D) on April 5, 2019, Washington's tobacco age restriction was set to increase from 18 to 21 on January 1, 2020. The functionality is limited to basic scrolling. More Benefits Insight Cafeteria Plan COLA May Require . The most common options include (i) HSA, HRA or FSA contributions; (ii) a decrease in employee contributions toward medical coverage (often referred to as a tobacco surcharge); and (iii) cash, gift cards or entries into a prize drawing. Finally, all models adjusted for year of survey (2015 or 2019). Youth access to tobacco law-RCW 70.155: Prohibits the sale and distribution of tobacco products to minors. Box 200130 Helena, MT 59620-0130 Reasons for not enrolling in marketplace coverage. Second, we separately estimated the effect of both the existence and the size of the tobacco surcharge, that is, whether allowing a tobacco surcharge influences insurance enrollment, and how the size of the surcharge implemented by insurers effects enrollment. to not pay the monthly surcharge) for 2023. Research: Josh Altic However, if banning surcharges is not feasible, policy makers might consider limiting surcharges to below the 50% federal cap. to reimburse all participants who paid the tobacco surcharge from July 1, 2011, to the present (plus interest), to revise its wellness program to comply with ERISA wellness incentive rules, to prevent Macys from collecting tobacco surcharges until it revises tis wellness program to comply with the ERISA rules, to empty all profits received as a result of its fiduciary breaches, and. High premiums and tobacco surcharges are reported by smokers to be barriers to enrollment in marketplace coverage. Our results are robust to these alternative specifications. The most common options include (i) HSA, HRA or FSA contributions; (ii) a decrease in employee contributions toward medical coverage (often referred to as a tobacco surcharge); and (iii) cash, gift cards or entries into a prize drawing. Keywords: Standard errors, clustered at the state level are shown in parentheses. Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors.
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